Sink­ing un­der a heavy debt load? There’s help

A credit coun­selor or even a money-savvy friend can help get you on the right path.

Los Angeles Times - - WORK LIFE - By Liz We­ston

Dear Liz: I am try­ing to get my fi­nances in or­der and, like many, I am strug­gling. The ma­jor­ity of my debt comes from stu­dent loans, but I also have un­se­cured debt that is weigh­ing me down. I work for a non­profit and know I need to con­tact my lenders to try to en­roll in the Public Ser­vice Loan For­give­ness Pro­gram, but my debt has me com­pletely frozen. Ev­ery few months I try to do some­thing and then I end up back where I am now, feel­ing over­whelmed. An­swer: You’re not alone. Credit coun­selors of­ten deal with peo­ple who are so par­a­lyzed by debt prob­lems they can’t even open their bills. Th­ese peo­ple bring in sacks of un­opened mail to their first ap­point­ments with the coun­selors.

If you haven’t been able to deal with your debt alone, then by all means, get help. A non­profit credit coun­selor is an op­tion; you can get re­fer­rals from the Na­tional Foun­da­tion for Credit Coun­sel­ing at www.nfcc.org. A fi­nan­cial plan­ner, a fi­nan­cial coach or even a money-savvy friend also can help you.

If you can force your­self to sim­ply call your stu­dent loan ser­vicers — the com­pa­nies that process the pay­ments on your ed­u­ca­tion debt — you can get the ball rolling. Th­ese com­pa­nies can de­ter­mine if you’re el­i­gi­ble for the Public Ser­vice Loan For­give­ness Pro­gram and help you start on the pa­per­work.

Public Ser­vice Loan For­give­ness can erase the bal­ance of your fed­eral stu­dent loans af­ter 10 years of pay­ments if you work in the public sec­tor.

To get the max­i­mum ben­e­fit, you would need to sign up for an in­come-based re­pay­ment plan and you may need to con­sol­i­date your loans.

All this in­volves ef­fort, but if you’re plan­ning to stay in public ser­vice, it can be worth­while.

The Trump ad­min­is­tra­tion has pro­posed end­ing the for­give­ness pro­gram for fu­ture bor­row­ers. Even if Congress en­acts such a change, it should not af­fect those who have al­ready taken out loans. But you’d still be wise to en­roll as soon as pos­si­ble.

Are you buy­ing a f lood-dam­aged car?

Dear Liz: You’ve been writ­ing re­cently about how to find a good, cheap used car. Can you write about how to re­search whether a car has been dam­aged in a flood? An­swer: Car­fax, which pro­vides ve­hi­cle his­tory re­ports, of­fers a free flood check in the “re­sources” sec­tion of the site’s press cen­ter.

Flood-dam­aged cars that have been to­taled by in­sur­ance com­pa­nies are typ­i­cally sent to auto re­cy­clers for dis­man­tling but some wind up back on the mar­ket. Th­ese cars are sup­posed to have sal­vage ti­tles that make clear their du­bi­ous his­to­ries, but it’s rel­a­tively easy for un­scrupu­lous sellers to reg­is­ter the car in a dif­fer­ent, more le­nient state that ob­scures its past. This is known as “ti­tle wash­ing.”

Car­fax’s ser­vice can help you spot the dam­aged cars, as can your own senses. A car that smells like mold or strong clean­ing so­lu­tion (to cover up the mold) is a bad sign. Car­pet­ing or up­hol­stery that’s ob­vi­ously newer than the car can in­di­cate it’s been re­placed af­ter flood dam­age. Look in the glove box and un­der the seats for mud or silt. A sag­ging head­liner on a newer car is an­other red flag.

A good me­chanic can help you spot prob­lems if you’re not sure. If the seller won’t let you take the car to your own me­chanic for in­spec­tion, don’t buy it.

Debt has a habit of hang­ing around

Dear Liz: Last year my dad had an ac­count he couldn’t make pay­ments on and it is show­ing up on his credit re­port as a closed, charged­off ac­count. As ex­pected, the lender sold it to an­other com­pany. The new com­pany now also has it listed as an open ac­count in col­lec­tion on his credit re­port. How can the same ac­count be listed twice? I thought the sec­ond com­pany couldn’t re­port it. An­swer: That’s not cor­rect. Once the debt was charged off and turned over to col­lec­tions, it could be re­ported again as a col­lec­tion ac­count. If the orig­i­nal ac­count still shows a bal­ance owed or more than one col­lec­tion shows up for the same debt, how­ever, your dad should def­i­nitely dis­pute it and file a com­plaint with the Con­sumer Fi­nan­cial Pro­tec­tion Bureau.

Liz We­ston, cer­ti­fied fi­nan­cial plan­ner, is a per­sonal fi­nance columnist for NerdWal­let. Ques­tions may be sent to her at 3940 Lau­rel Canyon, No. 238, Stu­dio City, CA 91604, or by us­ing the “Con­tact” form at askl­izwe­ston.com. Distributed by No More Red Inc.

Luis Sinco Los An­ge­les Times

THE PUBLIC Ser­vice Loan For­give­ness Pro­gram can erase the bal­ance of fed­eral stu­dent loans. Above, com­mence­ment in 2016 at Scripps Col­lege in Clare­mont.

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